Supreme Court could undo a $1.75 billion judgment given to victims of terrorist attacks sponsored by Iran

Rescue workers sift through the rubble of the U.S. Marine base in Beirut in Oct. 23, 1983 following a massive bomb blast that destroyed the base and killed 241 American servicemen.
(AP Photo
WASHINGTON (AP) — The Supreme Court said Thursday it will hear an appeal from Iran's central bank over a $1.75 billion judgment awarded to victims of terrorist attacks, including the 1983 bombing that killed 241 American soldiers in Lebanon.

The justices agreed to review a ruling from the federal appeals court in New York that said the judgment against Bank Markazi could be distributed to several hundred victims and families of those killed or injured in attacks sponsored by the government of Iran.

The high court will consider the long-running dispute as relations between the United States and Iran have thawed in the wake of a deal that curbs Iran's nuclear program in exchange for relief from economic sanctions.

The bank had argued that seizing the assets would conflict with treaty agreements between the United States and Iran. The money is in the custody of a court-appointed trustee after President Barack Obama in 2012 ordered Iranian assets blocked, including those of Bank Markazi.

In its appeal, the bank asserts that Congress overstepped its authority when it passed a 2012 law allowing plaintiffs in the lawsuit to be paid from Bank Markazi's assets. The bank argues that a law aimed at directing a result in a specific court case violates the separation of powers.

The lawsuit also includes victims of the 1996 terrorist bombing of the Khobar Towers in Saudi Arabia, which killed 19 service members. Each family was expected to receive about $5 million after attorney fees.

The Supreme Court agreed to take up the case even though Solicitor General Donald Verrilli had urged the justices to let the appeals court ruling stand.

The Beirut bombing was blamed on the Lebanese Shiite militia Hezbollah, which is backed by Iran. Lawyers for the victims argued that evidence showed that Iran's late supreme cleric, Ayatollah Ruhollah Khomeini, and other top leaders authorized and planned the bombing.

In the early morning hours of Oct. 23, 1983, a truck filled with more than 2,000 pounds of explosives sped past a guardpost and exploded outside the four-story Beirut barracks while most servicemen were still sleeping. The soldiers killed and wounded in the attack were part of a multinational peacekeeping mission to help stabilize a violent civil war between Christians and Muslims.

The lawsuit against Iran was filed under a 1996 U.S. law that allows Americans to sue nations that the State Department considers sponsors of terrorism for damages suffered in terrorist acts.

The high court is expected to hear arguments this winter in Bank Markazi v. Peterson, 14-770.